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Showing 501 to 520 of 6519 Records

2013 (12) TMI 534

Penalty u/s 271(1)(b) – Non appearance or non-compliance of two notices - Held that:- The Authorized Representative of the assessee had attended the proceedings on 14th December, 2009 when he was told that a detailed show cause notice is being issued - It is not a case where the assessee did not willfully comply with the notice issued by the Department - This contention of the assessee is further substantiated with the show cause notice issued by the AO on 16th December, 2009 for which the reply was sought to be filed within five days - The assessee also had filed the reply on 29th December, 2009 - Sustenance of penalty for default of notice u/s 143(2) dated 8th December, 2009 is unjustified – Decided in favour of assessee.
2013 (12) TMI 533

Disallowance of depreciation – Held that:- Following Plastiplends India Ltd. vs. ACIT [2009 (10) TMI 39 - BOMBAY HIGH COURT] - For the purposes of deduction under Chapter VIA, the gross total income has to be computed inter alia by deducting the deductions allowable under section 30 to 43D of the Act, including depreciation allowable under section 32 of the Act, even though the assessee has computed the total income under Chapter IV by disclaiming the current depreciation – Decided against assessee. Disallowance of interest on borrowings – Held that:- both the parties have separate submissions – The issue was restored to examine the issue in the light of fund flow statements and also on the basis of section 14A(2) to examine whether at all with the correctness of the cash flow statement, any disallowance could be made u/s 14A and then section 36(1)(iii) - The disallowance shall be looked into from both the angels, i.e. 36(1)(iii) and section 14A.
Bad Debts – Held that:- If the bad debts are written off in the books of accounts, the claim is allowable – Assessee neednot prove irrecoverability of such debts - Decided against Revenue.
Excise Duty – To be included in total turnover or not – Held that:- Following CIT vs. Sudarshan Chemicals Industries Ltd. [2000 (8) TMI 73 - BOMBAY High Court] - Sales tax and excise duties are levied under the separate enactments which have different objects. We are concerned with section 80HHC which is a separate code by itself. Hence, the general definition of the word turnover or the case law dealing with the said definition under the Sales Tax Act which is a State levy, cannot be imported into section 80HHC – Decided against Revenue.
Amount received on sale of DEPB – whether represents profit u/s 80HHC - Held that:- Following Topman Export vs. CIT [2012 (2) TMI 100 - SUPREME COURT OF INDIA] - Where DEPB accrues to the assessee in one previous year and it transfers the DEPB certificate in another previous year, only ninety per cent of the profits on the transfer of the DEPB covered under cl. (iiid) of s. 28 and not ninety per cent of the entire sale value including the face value of the DEPB has to be excluded to arrive at the "profits of the business" under cl. (baa) of Explanation to s. 80HHC - The issue was restored for fresh decision.
2013 (12) TMI 532

Validity of proceedings u/s 158BD – Search and seizure operation were carried out on the residential and office premises of M/s Keystone Realtors Pvt. Ltd., of which CPDPL is one of the group companies - In the search, the JV agreement was found and seized and along with that certain documents were seized wherein there was evidence on money having been received by the assessee on the sale of some flats by such company – Held that:- Following Manish Maheshwari vs ACIT [2007 (2) TMI 148 - SUPREME COURT OF INDIA] - For the purposes of initiating proceedings u/s 158BD, the AO who had conducted search, must record reasons for transferring material connected with another person and transfer the material to the AO having jurisdiction over the person, on whom the block assessment has to be framed - As borne out from the letter from the ACIT 17(3) “The material and statement asked for are not in possession" - This fact is further strengthened, because, the DR sought time to ask the AO one last time, which was duly allowed to the DR, to enquire, whether there is any material against the assessee, the DR, once again, showed his helplessness on the issue of producing the material relied upon by the AO to initiate and make an assessment under section 158BD – Decided against assessee.
2013 (12) TMI 531

Rejection of appeal u/s 249(4) – Non-payment of tax – Held that:- The assessee requested the learned CIT(Appeals) for recalling of the order as the defect of non-payment of tax on returned income was removed – Following Bhumiraj Constructions Vs. Addl CIT [2010 (4) TMI 754 - ITAT MUMBAI] - if the appeal is filed without payment of tax on returned income but subsequently the required amount of tax is paid, the appeal shall be admitted on payment of tax and taken up for hearing – Following J.K. Chaturvedi vs. ACIT [2003 (9) TMI 286 - ITAT AHMEDABAD] - Appeal in violation of 249(4) would be termed as defective one and the moment defect is cured then this can be disposed of on merit subject to limitation – The issue was restored for fresh decision.
2013 (12) TMI 530

Penalty u/s 271(1)(c) – Held that:- The assessee claims that the property was intended to be sold as per the market practices and in consequence thereof a business decision was taken to first let out the property and then sell the same as a gainful let out property - The assessee's conduct is supported by the fact that immediately after letting out, the property was sold and out of three months advance rent, two month's rent was passed on to the purchaser. The genuineness of the rent and brokerage has not been questioned - Earning rent, the incurring of business (brokerage) expenditure and business income on sale of property i.e. stock in trade was incorporated in the books of a/cs of the assessee and particulars thereof were filed with the return of income - Following Hindustan Steel Ltd. V. State of Orissa [1969 (8) TMI 31 - SUPREME Court] - As the assessee bona fide belief is discernable and the relevant details were furnished along with return of income – Decided in favour of assessee.
2013 (12) TMI 529

Reasonable opportunity not provided to assessee - Held that:- Due to paucity of time and bonafide belief, the Ld.AR was not in a position to file the relevant materials before the - When the assessee has relied upon the additional evidence in the first appellate proceedings, the same ought to have been admitted when the Ld.CIT(A) has been relying on remand report on the additional evidence filed by the assessee – The issue was restored for de novo assessment after giving reasonable opportunity of hearing and placing all the evidence on record which can support the case of the assessee.
2013 (12) TMI 528

Penalty u/s 271(1)(c) – Held that:- There is no concealment nor furnishing of inaccurate particulars in this case. The assessee had made disclosures and had made conscious claims for interest payable – Following CIT vs.Reliance Petro [2010 (3) TMI 80 - SUPREME COURT] - To attract penalty, the details supplied in the return must not be accurate, not exact or correct, not according to the truth or erroneous. Where there is no finding that any details supplied by the assesse in its return are found to be incorrect or erroneous or false there is no question of inviting the penalty under Section 271(1)(c) – Decided against Revenue.
2013 (12) TMI 527

Set off of capital loss from assets on which depreciation was claimed – Long term capital loss against long term capital gain – Held that:- Following CIT Vs ACE Builders [2005 (3) TMI 36 - BOMBAY High Court] - the deeming fiction under section 50 is restricted to section 50 only and the said fiction is restricted only to the mode of computation of capital gains contained in Sections 48 and 49 – Following Komac Investments & Finance Pvt. Ltd Vs ITO [2011 (4) TMI 705 - ITAT MUMBAI] - Although the gain is short term capital gain due to the fiction created by provisions of S. 50(2), the asset remains as "long term capital asset - The brought forward long term capital loss can be set off against the capital gain on account of transfer of the depreciable asset which has been held by the assessee for more than 36 months thereby making the asset a long term capital asset – Decided against Revenue.
2013 (12) TMI 526

Disallowance u/s. 40(a)(ia) – Leaseline and transaction charges - Held that:- Following DCIT Vs Sonal Shares & Stock Brokers (P) Ltd [2010 (2) TMI 910 - ITAT, Mumbai] - The stock exchange do not provide any technical services by installing VSAT net work. It is the facility provided to its members. Therefore payment of VSAT cannot be said to be of the nature of fees for any technical services rendered and hence the assessee is not required to deduct tax u/s. 194J on such payment – Decided in favour of assessee.
Rebate u/s 88E – Deduction of STT - Held that:- Following Horizon Capital Ltd. Vs ITO [2011 (10) TMI 489 - KARNATAKA HIGH COURT] – The provisions of Sec. 87 & 88A to 88E also apply after the total income is computed u/s. 115JB of the Act - If the transaction on which STT is paid is included in the total income of the assessee where the total income is assessed either under the provisions of the Act or under Section 115JB when tax chargeable on such income is arrived at & it is from that tax which is chargeable, the tax paid u/s 88E is given deduction, by way of rebate, u/s 87 - The assessee is entitled to a deduction of the amount equal to the STT paid – Decided against Revenue.
Disallowance of mark to market loss – Held that:- Following CIT Vs Arjan Khimji & Co [1978 (7) TMI 35 - BOMBAY High Court] - As per guidelines of SEBI, it is imperative to all who have open position, in the F&O segment on the end of the financial year i.e. 31st of march to show mark to market loss in their books of account - The losses booked on the close of the financial year in respect of open positions in futures is a crystallized liability and therefore allowable – Decided in favour of assessee.
2013 (12) TMI 525

Disallowance u/s 14A – Held that:- Following Godrej Boyce Mfg Co [2010 (8) TMI 77 - BOMBAY HIGH COURT] - The provisions of Rule 8D are not applicable to facts of the present case - The Assessing Officer is duty bound to determine the expenditure which has been incurred in relation to income which does not form part of the total income under the Act. The Assessing Officer must adopt a reasonable basis or method consistent with all the relevant facts and circumstances after furnishing a reasonable opportunity to the assessee to place all germane material on the record – The issue was restored for fresh decision.
Disallowance u/s 36(1)(va) - Employee’s contribution towards PF and ESI – Held that:- Following assessee’s own case for A.Y. 2005-06 - Payment held within grace period are allowable under section 43B – Decided in favour of assessee.
2013 (12) TMI 486

Stay of demand - Held that:- It is open to the petitioner to appear before the Deputy Commissioner of Income Tax and satisfy him that an amount of Rs.1,48,79,983/- has been paid so far - The petitioner will pay to the revenue the balance amount so as to make it 50% of Rs.3,04,25,790/- within 10 days from today - Upon such deposit, the balance outstanding demand of 50% of the Rs.3,04,25,790/- will be stayed - The respondent not to take any coercive steps for recovery of the tax demand for a period of 10 days from today and on the petitioner paying in the aggregate 50% of the outstanding demand of Rs.3,04,25,790/- within 10 days from today, there shall be a stay for recovery of the balance of 50% of the tax - The petition is disposed off.
2013 (12) TMI 485

Depreciation on assets - Held that:- The Tribunal should have made an open remand for considering the depreciation on assets that the assessee used in the business - The direction of the Tribunal is contrary to law - Without being influenced by the observation made, the Assessing Officer shall consider the claim of the appellant/assessee as regards the depreciation on the fixed assets, for the purposes of finding out the compliance of Section 11 of the Act - Decided in favour of assessee.
2013 (12) TMI 484

Penalty u/s 271AAA - Surrender of income at the time search - Held that:- The AOP consisted of Virendara Kumar Gupta, Sarad Jain and Sudhir Jain - Initially, the AOP had declared the entire undisclosed income - AOPs are taxed at maximum marginal rate, whereas individuals are taxed on cascading scale. The Assessing Officer had himself given tax credit to individual members of the tax paid by AOP - Taxes and applicable interest were paid on the undisclosed income - Details of nature of undisclosed income and manner of earning was recorded in the statement of Virendara Kumar Gupta - The income was derived from trading transactions not recorded in the books - Decided against Revenue.
2013 (12) TMI 483

Cash payment to lorry driver - disallowance u/s 43A(3) - Held that:- There is hardly any material to substantiate the case of the assessee that the lorry driver acted in the dual capacity one of which happened to be as the agent of the assessee - A reading of the affidavit extracted filed show that the lorry owner collected the freight from the assessee through the driver for the concerned lorry - Lorry freight was paid in cash by the assessee to the lorry drivers because they needed cash to purchase diesel, tyres and spare parts and for repairs en route - The lorry drivers acted only on behalf of the lorry owners and collected the freight from the assessee - The reason why they collected cash was that they do not have any bank in that place like Virudhanagar - The payers were not in a position to furnish the affidavit that the lorry payments had already been recorded in their books of accounts and they were assessed to tax before their respective Assessing Officer - The assessee's only claim before the authorities was that the driver acted in dual capacity, for which there is no evidence - Being pure question of fact without any material to substantiate the case of the assessee - Decided against assessee.
2013 (12) TMI 482

Undisclosed investment - Held that:- The A.O. and CIT(A) have taken the different methods for calculating the initial investment in the form of gold - Different figures were emerged as undisclosed investment in purchases - The facts are quite contradictory, as different figures were claimed by the counsels during the course of arguments - The same needs fresh determination - The Tribunal has not examined properly the facts pertaining to the availability of investment - The finding of facts are not clear and the material available on record was ignored - The issue was restored for fresh adjudication.
Cash found during search - Held that:- The cash belonged to the assessee's relative - The assessee has filed an affidavit in this regard - The said affidavit which is self explanatory was accepted by the CIT(A) as well as by the Tribunal and accordingly addition in question was deleted - Following Kamala Ganapathy Subramaniam And Another Versus Controller Of Estate Duty [2001 (2) TMI 132 - SUPREME Court] - The Tribunal is a final fact finding authority - Decided in favour of assessee.
2013 (12) TMI 481

Bad debts on running and terminated chit funds - Held that:- Following assessee's own case for AY 2009-10 - The amount of loss incurred by the assessee has to be allowed on both running and terminated chits if irrecoverable if the prized chit amount has gone out of the hands of the assessee - Bad debts can be allowed to the extent of instalments defaulted by the prized subscribers and written off as bad debt in the books of the assessee - The issue was remitted back for fresh adjudication.
Taxability of foreman dividend - Held that:- Following assessee's own case for earlier A.Y. 1991-92 to 1994-95 - The assessee was a business concern and its aim was to make profits and, thus, the principles of mutuality could not be applied to it - The assessee had earned income for the purposes of its business and to be utilised only for the purposes of its business - The assessee company participated in chits promoted by other companies or entities - Profit earning was the motto of the assessee- company - The profits in question arose and accrued from the trade or vocation which it carried on. The principles of mutuality are based on the concept that no one can make profits out of himself. The essence of mutuality is of complete identity between the contributor and the participator - Decided against the assessee.
Commission on cancelled chits - Held that:- Following assessee's own case for A.Y. 2009-10 - The amount that is payable to the defaulting subscriber consequent to his replacement by another person the company is entitled to deduct 5% as commission - This has nothing to do with the regular commission Income of the assessee - The commission Income accrues when the accounts have been finally settled to the defaulting non subscriber - In case of a non-prized subscriber the amount of 5% would be deducted from the amounts due to him much before the settlement of his account and recognised as income by way of transfer from current liabilities to profit and loss account - Decided against Revenue.
Royalty payment - Held that:- The payment of royalty at 0.5% of having regard to the business requirements of the assessee is for legitimate benefit taken in the course of business and from any standard, it cannot be said that payment of Rs.1 lakh as royalty is sufficient to produce the business of the magnitude procured by the assessee over the years - The holding company has entered into similar agreements with other subsidiary companies and the CIT(A) has considered the same to be reasonable business outflow property under a specific agreement executed by the parties is very much reasonable and should have been accepted as a business expenditure allowable as deduction - Decided against Revenue.
2013 (12) TMI 480

Cess on green leaf - Held that:- Following CIT vs AFT Industries Ltd. [2004 (7) TMI 81 - CALCUTTA High Court] - Deduction is eligible after computing the income under Rule 8 and the apportionment is to be made only after the income is so computed - Such apportionment cannot be made before the deduction. Rule 8 of the Income-tax Rules, 1962, requires that the computation is to be made as if by fiction the entire income out of the tea grown and manufactured as income assessable under the Income-tax Act, 1961 - Decided against Revenue.
Employees' Contribution to ESI and PF - Held that:- Following CIT vs M./s Vijay Shree Limited [2011 (9) TMI 30 - CALCUTTA HIGH COURT] - The amendment to the second proviso to the Sec 43(B) of the Income Tax Act, as introduced by Finance Act, 2003, was curative in nature - It is applicable retrospectively with effect from 1st April, 1988 - Such being the position, the deletion of the amount paid by the Employees' Contribution beyond due date was deductible by invoking the aforesaid amended provisions of Section 43(B) of the Act - Decided against Revenue.
Interest income - Held that:- The interest income as liable to be assessed only under the head 'profits and gains of business' and that too only the net of the interest - The assessee is carrying on the business for past several years - In the course of carrying on of its business, the assessee borrowed funds on which interest is paid - On occasions when the company left with surplus business funds, which were deployed in making short-term inter-corporate deposits and loans and advances - Such activity of lending money is carried on systematically and in an organized manner with a view to commercially exploit the business funds of the assessee company - The interest income is assessable as business income, more so when admittedly, the return from these loans was much higher than yield form the bank deposits - Decided against Revenue.
2013 (12) TMI 479

Share application money - Held that:- The assessee has produced the bank accounts statement of the creditorsand the confirmation from the parties from which share application money was paid to the assessee - The transactions of payment of application money was through bank accounts - The Assessing Officer has not made any inquiry to prove that the evidence produced by the assessee is not correct or bogus - The assessee has furnished the complete details of the bank accounts including the amounts deposited in the bank accounts and sources of the said deposited, then the assessee has discharged its onus of proving the capacity and the sources of the application money - The assessee has refunded the entire share application money to the parties because allotment of shares could not be materialized which further strengthen the case of the assessee that the transaction is genuine - The assessee has discharged its onus of proving the identity and the capacity of the creditors as well as the genuineness of the transactions - The creditors didnot have any nexus or relation with the assessee except being investors by making payment of the application money - Decided in favour of assessee.
2013 (12) TMI 478

Loss from derivative transactions - Capital loss or business loss - Held that:- Income arising to a FII from the transfer of `securities” as specified in Explanation (b) to sec. 115AD can only be considered as short-term or long-term capital gain - It is impermissible to consider such income as falling under the head "Profits and gains of business or profession". Such income arising from the transfer of securities shall be charged to tax under the head "capital gains" alone. Once inclusion of such income from the transfer of securities is held to be falling only under the head "Capital gains", it cannot be considered as `Business income”, whether speculative or non- speculative - Sec. 43(5) has no application to FIIs in respect of “securities” as defined in Explanation to sec. 115AD, income from whose transfer is considered as short term or long term capital gains - It is a well settled legal position that specific provisions override the general provisions - Decided in favour of assessee.
2013 (12) TMI 477

Deduction u/s 10A - Held that:- The assessing officer could not entertain the claim made by the assessee otherwise than through a revised return, nothing prevented the learned Commissioner of Income-tax(Appeals) from considering the claim of the assessee, which the assessee had specifically, raised in its ground of appeal - This decision of Hon'ble Apex Court is limited to the power of assessing authorities for considering a claim made by the assessee which was originally not there in the return - The first appellate authority has power to entertain a claim of deduction not made before the Assessing Officer - The appellant is eligible for deduction u/s 10A - Decided against Revenue.